Kuwait suspends executives over Dow Chemical payment

Kuwaiti members of parliament are seen in the Abdullah al-Salem hall at the national assembly in Kuwait City on May 14, 2013. Kuwait's cabinet suspended on Thursday several senior oil executives over a $2.2 billion penalty paid to Dow Chemical for scrapping a joint venture and ordered a judicial investigation into the matter, an official statement said

Kuwait's cabinet suspended on Thursday several senior oil executives over a $2.2 billion penalty paid to Dow Chemical for scrapping a joint venture and ordered a judicial investigation into the matter, an official statement said.

The decision was taken at an extraordinary meeting, which also decided to appoint a new chief executive officer for national oil conglomerate Kuwait Petroleum Corp (KPC), the statement said.

The cabinet decided to "take the necessary measures to suspend senior officials at (state-owned) Petrochemicals Industries Co (PIC)," which arranged the joint project with Dow Chemical before it was scrapped by the government in December 2008.

Last May, the International Chamber of Commerce, acting as an arbitrator, granted Dow Chemical around $2.2 billion (1.7 billion euros) in compensation for Kuwait unilaterally withdrawing from a $17.4-billion petrochemicals project.

The cabinet also asked its legal agency to initiate legal action by referring the issue to the public prosecution, which will launch an investigation into the deal.

Kuwait has been locked in a political crisis since MPs earlier this week filed a bid to question Oil Minister Hani Hussein over the payment.

In a front-page editorial last week headlined "A company hunts a state," the liberal Al-Qabas newspaper demanded firm action against those responsible for the joint venture failing.

"Kuwait has lost a suspicious deal and is now paying the price... A mistake in procedures, in the deal and in the cancellation has cost the state billions" of dollars, it said.

"There are people responsible for this and these must be held to account."